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posted by HearHere at 2:25 AM on August 24 [2 favorites]

Excellent piece, well worth the time to read, even if you too have been sucked into cashless living. (I sure have—the UK as a whole is well on the way to Björn Ulvaeus's cashless utopian vision. That's right, come for the digs at economists, stay for the side-points about AI and unexpected connections to ABBA.)
posted by rory at 2:48 AM on August 24 [5 favorites]

I'm going to catch up on this - ironically for being part of the ecosystem both as user and part of the advocacy space (but not specifically Fintech, just digital solutions as one of the tools to increasing access to basic banking) I do agree cash's fungibility and anonymity are invaluable. But I wonder how much of that is my bias for already being in a cash-available society as I learn more about other jurisdictions (outside the ones usually mentioned) with poor connectivity in terms of its banking. Like, do you know that in Mauritania one of the most established and trusted money transfer service in the country for decades now started out as a secondhand phone shop chain? Because ATMs were hard to come by, what more physical bank branches, it just so happens, as the story goes, a customer of that phone shop asked if he can use them to send money to a family member in the next town via that town's outlet. They had a whole manual system of checks and balances too, it was fascinating. (I'm telling this story and pausing realizing I'm going to about to walk into my mefi brand at this point but I don't mean to, anyway here's the name: Gaza Telecom - no relation apparently, just sympathy)

And island states may have a different kind of geography but they also have just as challenging infrastructural needs.

But pieces like this remain useful though because I have to admit, part of the development world's bias against the global south (for reasonable historical reasons on why it came about) is perpetuated in this line of work so ironically it's global North economies where this entire space seems to be captured totally by market and regulators seems absent or late (e.g. I still can't believe FedNow is only about to be piloted in the US, which will bring consumer account-level money transfers at no cost and without depending on third party vendors like Venmo). But western primacy will assert themselves eventually so you get entities like Mastercard Foundation meeting with representatives of government, who then usually need more support to assess the lobbying (seeing that their Global North govt counterpart is absent in modelling policies).
posted by cendawanita at 3:15 AM on August 24 [8 favorites]

in focussing on the trauma that could emerge when cash is around, Björn fails to reflect on all the trauma that could emerge when it isn’t

This piece doesn't acknowledge the role of the issuing bank for backing up that fiat cash token with something meaningful. We have national territory, armies and policing as part of the ecosystem protecting the cash value.

As for that digitisation, it's a trade-off. Putting the cash value in a database makes it so much easier to audit and trace criminal activity, tax evasion/avoidance, money laundering and sanctions-busting activity. You might be a family of organised criminals, or you might be an excluded political activist -- it's on citizens to rein in the politicians who make up authoritarian governments so that this database-nunber cash is a net benefit to society.

I live in a country with fast-flowing bank-to-bank transfers and slow cancellation and return cycles. We also have to protect people from being scammed out of their life savings, but the population as a whole are learning, sometimes the hard way.

Maybe the trade-off ought to include licensing the illicit goods that make people need untraced cash, maybe also providing help to manage drug addiction.
posted by k3ninho at 4:17 AM on August 24 [2 favorites]

This jumps very quickly to the language of addiction for the simple act of paying with a card, but it doesn't really make a case that addiction is what it is, it basically states it is then describes it in terms of addiction. There is certainly a case for considering the wider implications of the shift to cashless but starting by trying to point to harm in such unsupported terms doesn't help to do that.
posted by biffa at 4:37 AM on August 24 [5 favorites]

I've made a deliberate move back to using mostly cash. It's cheaper, I worked out what I was paying in transaction fees, and I can keep track of what I'm spending much more easily. Small businesses prefer it as well and I've heard from a few of them that there's been an increase in cash use recently. That's a whole bunch of anecdote, but I don't think I'm entirely alone.
posted by deadwax at 5:55 AM on August 24 [10 favorites]

Using cash to eliminate siphoning money off to distant megacorps, keeping more of it in the community, and helping small businesses is something that I hear championed by my few right-wing acquaintances online. I largely agree in principle, and I make it a point to use cash at local places I like, but it's weird that among all the twisted rhetoric and misinformation these people have swallowed, there might actually be something decent.
posted by SaltySalticid at 6:17 AM on August 24 [4 favorites]

Thank you chavenet; you are killin it!
posted by toodleydoodley at 6:56 AM on August 24 [2 favorites]

Re: small businesses - I wonder how much is this driven by the basic things like bank transfers being super difficult in the US? (unless that's not a US anecdote)

Interestingly I have heard about fraud as an ongoing issue like in Uganda when it comes to mobile money (via fake SMS transfer notices so that's like basic feature phone tech), so I do make a point of asking in other places when I can. Fake notices can happen (there was a 'funny' story in Singapore where a diner essentially scammed a restaurant for about a year because she kept using the same screenshot to show that she's paid by QR code) but overall if either side actually tracks their respective app notifications I tend to find small businesses as happy with using e-transfer - it does get mentioned that they feel safer that they're not carrying a lot of money with them at the end of the day (mind you we're talking about places where physical branches aren't easy to find or get to and traders themselves may not be driving vehicles or even safely built ones to get them to those branches). Like in my country it can happen with high turnover businesses but with high overheads like petrol station franchisees who thinks they're saving money by not using armoured truck services for banking runs who find themselves at machete point at the traffic light because gangs were tracking their movements. In other places what counts as high turnover may be several thresholds lower so it can just be an itinerant vegetable seller on an unlucky day.
posted by cendawanita at 7:07 AM on August 24 [5 favorites]

I've made a deliberate move back to using mostly cash. It's cheaper, I worked out what I was paying in transaction fees, and I can keep track of what I'm spending much more easily. Small businesses prefer it as well and I've heard from a few of them that there's been an increase in cash use recently.

I’d say places like restaurants, bars, etc. are driving customers back to cash (however unintentionally) due to their passing the card transaction fees through to their customers. It’s pretty impossible in my neck of the woods to use a card without getting the transaction fee added-on. I’ve always carried cash to use for tipping, so a couple of extra bills is no problem.

(Highly) Anecdotally, it seems the younger the customers are, the less likely they are to use cash for anything, including tips. They’re just accustomed to using their cards for everything, transaction fees or no. The convenience of the even further abstraction of money.

and don’t get me started about restaurants/pubs going entirely electronic by making you scan a QR code just to look at a fucking menu or tap list...
posted by Thorzdad at 7:28 AM on August 24 [5 favorites]

Counterpoint to myself and more from other places where fintechs are nickel-n-diming users: the Philippines seems to be a good example where the market is dominated by proprietary e-wallets that make it a point to be difficult to use the publicly mandated free methods (as I understand it) or even to each other - ecosystem lock-in is a clearly a corporate motivation*, and the transaction costs don't seem to get treated as marginal either.

*I had a guy show me the many windows he had to go through just to do one transaction and yikes.

I’d say places like restaurants, bars, etc. are driving customers back to cash (however unintentionally) due to their passing the card transaction fees through to their customers.

Wait wait wait - that's not illegal? Like ministry (or equivalent) taking away your business license (or fines) illegal? We had businesses like that too until the ministry overseeing trade really pushed on enforcement who'll send out officers based on socmed complaints (if they're not receiving it on WhatsApp).
posted by cendawanita at 7:34 AM on August 24 [3 favorites]

In the US? It’s nebulous. Often you see it termed as a “convenience fee” which technically gets around any illegalities. Everyone knows it’s the card transaction fee, though.
posted by Thorzdad at 7:56 AM on August 24 [4 favorites]

I don't normally buy coffee/tea/etc. when I'm working in the office, but the other day I just needed something so I crossed the street to the local, independent coffee shop. After placing my order and digging out my wallet to pay, I was told they don't take cash. I had to decide whether to walk away or do something I don't normally do--put a small charge on my credit card. I wound up doing that and really resenting it because that's not how I manage my finances. Oh, and my drink wasn't very good either. While I don't expect to be placing a lot of beverage orders, the next time I'll just walk a few more steps further down the street to Starbucks. Even though I prefer to support local businesses and while I strongly dislike that particular coffee chain's management policies, I really don't like being forced to pay with plastic.
posted by sardonyx at 8:00 AM on August 24 [3 favorites]

My wife often gets a good laugh out of me going to the absolute mat to refuse to pay a "convenience fee" when I'm paying a bill. We live in a condo, so all our utilities are managed as one bill, and they will allow me to send them a paper cheque through the snail mail like it's 1975, but if I try to pay online they're always like "there's a $5 convenience fee" and I'm like game fucking ON. Sometimes, they're like heavy sigh FINE and don't charge me and sometimes they refuse, and then I'm like fine get your paper cheque a month from now. My willingness to spend half an hour on the phone to avoid this is on par with my willingness to say "I want to talk to a human" over and over again until someone's stupid "digital agent" sends me to an actual human being. She's like I'm glad you're passionate about something.

The really good local pizza chain here went cashless a few months ago, and it boils my blood. It's absolutely discriminatory against poorer people who get nickeled and dimed for card transactions.
posted by outgrown_hobnail at 8:07 AM on August 24 [9 favorites]

Have we done "retail banking as a universal basic service"? (I can't find a previously.) Wherein there's little-to-no profit in everyday check-deposit accounts so fiat currency is supplied via a national database with debit cards and apps.
posted by k3ninho at 8:56 AM on August 24 [2 favorites]

Often proposed as “postal banking” , yes?
posted by clew at 9:03 AM on August 24 [6 favorites]

passing the card transaction fees through to their customers.

Wait wait wait - that's not illegal?

Even better — my state, and maybe the US Feds, are legally required to not pay the fee to the credit card companies. Eg., in the small print on my car license assessment, among the postal address and ACH instructions, it mentions the legal requirement for the citizen using a card to pay to cover card costs.
posted by clew at 9:07 AM on August 24 [5 favorites]

!!!! So if I understand my jurisdiction correctly, that's not on the state/local government or the consumers to pay. That's on the business.

Often proposed as “postal banking”, yes?

Outside the US that's basically where the world is through online bank transfers then mobile then digital e-wallets and in a lot of places, QR codes as part of that ecosystem, so a lot of small businesses if they won't have a card terminals they'll post their codes at the till because that's just going to be going into their bank account. I'm not sure if there's some kind of different subsidies that may be happening for select markets though (eg for a certain band of sales volume it might be "free") or it's not that high for a lot of countries (it happens - until recently private insurance here has no concept of co-pays so full coverage is full but then of course our govt got coopted into believing the industry lobby that co-pays will be important for fiscal responsibility.).
posted by cendawanita at 9:19 AM on August 24 [2 favorites]

My sense is that typically in the US merchants are required by their agreements with credit card issuers not to charge CC customers an extra fee, and that some places (primarily gas stations) got around that with discount for cash purchases. But that may be incorrect or outdated, and it might not apply to non-retail transactions.
posted by Horace Rumpole at 9:40 AM on August 24 [3 favorites]

The major reason I gave up on cash for almost everything is inflation. Two teenage boys means a weeks worth of groceries is $300, minimum, and everything else is equally inflated. Tank of fuel for the minivan? $120. Some basic cleaning supplies and yard waste bags at Canadian Tire this morning? $70. I don't want to carry around $1000 in cash just to meet weekly expenses. And that would likely have to be all in $20s, as that is the only thing most ATMs spit out and a lot of shops are wary of larger bills. I only used cash when I could take out $150 and have more than enough to cover a week, but those days are long gone.

But then in Canada we have the Interac electronic transfer system, which is absolutely everywhere and doesn’t have fees, just tap your card and go. I never use a credit card unless here is no other option, like renting a car, or for major purchases. If I lived somewhere like the US with a hodgepodge system I probably would be wary of electronic payments too.
posted by fimbulvetr at 9:50 AM on August 24 [6 favorites]

I haven't spent folding money in . . . shit, I don't know any more. My go-to payment mechanism is booping my phone linked to my main credit card. When I was in Japan last year, I was booping my Apple Watch linked to a transit card (Suica ) balance instead, that was fun.

I keep a ¥5000 note in my wallet so something's there.
posted by torokunai at 11:19 AM on August 24 [1 favorite]

The really good local pizza chain here went cashless a few months ago, and it boils my blood. It's absolutely discriminatory against poorer people who get nickeled and dimed for card transactions.

Homeless people who accumulate money by panhandling and might want a slice of pizza will be completely excluded, and I suspect that’s one of the main reasons the pizza chain and other such businesses want to go cashless.
posted by jamjam at 11:20 AM on August 24 [3 favorites]

→ But then in Canada we have the Interac electronic transfer system

It's also a not for profit company, so all the rent-seeking noise goes away.

I had to use cash last night at a music event for the first time in years. I didn't have enough, even though I thought I did. So I didn't get what I wanted, and the artists didn't get the money I wanted to give them. Blecch
posted by scruss at 11:28 AM on August 24 [2 favorites]

if I understand my jurisdiction correctly, that's not on the state/local government or the consumers to pay. That's on the business.

It's on the customer/citizen; AIUI the reasoning is,
1) the voters decided that the state of Washington gets X dollars for licensing X vehicle;
2) if the bill for $X is paid through a card, the state gets $(X-vig);
3) the state may not accept less than $X, so the bill-payer gets to choose whether using the card is worth adding $vig to their payment.

This seems very reasonable to me, as someone deeply annoyed by middleman cuts to my low-margin business.
posted by clew at 11:34 AM on August 24 [1 favorite]

Homeless people who accumulate money by panhandling and might want a slice of pizza will be completely excluded, and I suspect that’s one of the main reasons the pizza chain and other such businesses want to go cashless.

I suspect that's more like a collateral benefit. The stated reason, which is not implausible, is to protect their employees from armed robbery. There was a string of incidents about two years ago where the closing staff of the kind of high-volume restaurants like pizza places became the targets of armed robbers, and a couple of young, innocent people got killed by the robbers (even after they'd given up the cash), and this was not only a terrible tragedy but also made it super difficult for restaurants to find closing staff.
posted by outgrown_hobnail at 11:42 AM on August 24 [2 favorites]

Thing is, card transactions are essentially low/no cost to perform. It’s all automated. It certainly doesn’t cost anywhere near the fees being charged. It’s a huge profit center that the banks have pretty successfully gotten people to shrug and accept.
posted by Thorzdad at 11:42 AM on August 24 [5 favorites]

There was a string of incidents about two years ago where the closing staff of the kind of high-volume restaurants like pizza places became the targets of armed robbers…

Cite? Respectfully, that sounds a lot like the bogus shoplifting scare retailers and their trade groups have been pushing on the public to justify higher prices and whatnot.
posted by Thorzdad at 11:49 AM on August 24 [2 favorites]

I gather there is a bill that would limit the fees the card companies charge to merchants, which I know only because of the ads I’ve seen denouncing this as a cash grab by wealthy retailers that will destroy card rewards programs.
posted by Horace Rumpole at 11:50 AM on August 24 [3 favorites]

A nifty piece of weirdness is how often at two adjacent and (basically) identical shops / restaurants / bars, one is giving a 2-4% discount for using cash, and one is prohibiting cash. My guess is that the one giving a cash discount has an on-premises owner/manager trusted to handle cash, and the other doesn't.

I go both ways. I run every personal and business expense I can through a point/incentive rich card and I carry around lots of cash to exploit the cash discounts when they're better than the points (for me about 2.5% does the trick).
posted by MattD at 11:54 AM on August 24 [1 favorite]

I don’t see how any American who spent four years seeing the depths to which Trump was willing to descend in using every single power available to government to pursue his vendettas and other utterly corrupted ends could really be in favor of a cashless society.
posted by jamjam at 12:07 PM on August 24 [5 favorites]

There are solutions to many of the technical issues.

For many, the transaction fees are related to card cards and are waived for debit cards. But debit cards aren't as safe as credit cards. Ensuring that safety (fraud protection, single-use cc#s) goes a long way.

Then, providing a national EFT like the Canadian one, stops the wealth transfer to corporations.

Part of the problem with physical money is how inflation affects it. Pennies were once a useful item of currency. Now they're just a bother.
posted by CheeseDigestsAll at 12:15 PM on August 24 [3 favorites]

For many, the transaction fees are related to card cards and are waived for debit cards.

FWIW, businesses around here treat credit and debit cards alike where fees are concerned. A card is a card is a card, and fees will be applied.
posted by Thorzdad at 1:12 PM on August 24 [1 favorite]

But then in Canada we have the Interac electronic transfer system, which is absolutely everywhere and doesn’t have fees, just tap your card and go.

Except if you're dumb like me, you end up paying a bunch of service fees to the bank rather than to the vendor. I just moved back to Canada four months ago, and have had a basic banking account at my bank since I left two decades ago, which has only had like maaaaybe ten transactions/month when I was home visiting family, at most, and I stupidly did not think about per-transaction fees when I moved back. They start charging after 12 transactions. I didn't notice charges in May and June (there was so much other stuff happening, not because they didn't charge me), but in July they charged me $40ish in transaction fees ($1.20 a pop, thirty-some transactions, almost all point-of-sale).

I could pay them for the convenience of an account with a higher transaction limit, but the idea of that made me mad, so I got a credit card, which I needed to do to start re-establishing credit here anyway, so I can put everything on the card and get points and not get dinged per-transaction.

Now I'm wondering if I wouldn't be better off getting cash and then bringing with me whatever amount I think I might need that day - it would almost certainly be better for society, but the grocery money they give you for points is really attractive to me because almost all of my money is going to groceries right now. So I don't know.
posted by joannemerriam at 1:42 PM on August 24

Wait wait wait - that's not illegal?

It's completely legal in Australia as long as the shopkeeper only passes on what the bank actually charges. Big supermarkets and the like seem to get charged little enough that they don't pass on anything but the little places I was at yesterday would have charged me 1.7% to use card, which is not really marginal. That is a representative amount.
posted by deadwax at 1:47 PM on August 24 [1 favorite]

I'm always thrilled when networks go down for extended periods in nations who've gone mostly cashless. lol

I'd expect payment system downtimes should only worsen as they become more complex, employ more complex hosting infrastructure, and endue more disruptions from conflicts, floods ala climate change, etc.

GNU Taler requires network, but otherwise nicely modernizes blind signature payments ala David Chaum. It's anonymous for the buyer, if not spending crazy amounts, so less advertising AI risk etc. It's bank transfers for the merchant, so taxable etc. It's a phone app so not easy to spend if stolen. It's ammenable to backup solutions, so lost phones need not lose the money, although this adds some complexity.

We do know off-line ecash systems, even going back to Chaum, but they were fairly painful in practice, due to much larger transactions, not sure if thet's shrunk much.
posted by jeffburdges at 3:55 PM on August 24

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